Note 5. Investment Securities Held-to-Maturity


	September 30, 2013								December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In thousands)
U.S. Government Sponsored Enterprises	$	276,509	$	637	$	1,756	$	275,390	$	17,747	$	19	$	8	$	17,758
U.S. Government Agency and Sponsored Enterprises Mortgage Backed Securities		1,098,203		5,334		7,809		1,095,728		257,760		6,480		74		264,166

Total	$	1,374,712	$	5,971	$	9,565	$	1,371,118	$	275,507	$	6,499	$	82	$	281,924

Included in U.S. Government and Agency Securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $550,098,000 and $149,366,000 at September 30, 2013 and December 31, 2012, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank of Boston at fair value amounting to $411,072,000 and $103,617,000 at September 30, 2013 and December 31, 2012, respectively.

At September 30, 2013 and December 31, 2012, all mortgage-backed securities are obligations of U.S. Government Agencies and Government Sponsored Enterprises. Government Sponsored Enterprises primarily refer to debt securities of Fannie Mae and Freddie Mac.

The following table shows the maturity distribution of the Company’s securities held-to-maturity at September 30, 2013.


	Amortized Cost		Fair Value
	(In thousands)
Within one year	$	20,936	$	21,053
After one but within five years		680,506		680,292
After five but within ten years		673,002		669,498
More than ten years		268		275

Total	$	1,374,712	$	1,371,118

The weighted average remaining life of investment securities held-to-maturity at September 30, 2013 was 5.2 years. Included in the weighted average remaining life calculation at September 30, 2013 were $209,956,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The actual maturities, which were used in the table above, of mortgage-backed securities, will differ from the contractual maturities, due to the ability of the issuers to prepay underlying obligations.

As of September 30, 2013 and December 31, 2012, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not more likely than not that it will be required to sell these debt securities before the anticipated recovery of their remaining amortized costs. In making its other-than-temporary impairment evaluation, the Company considered the fact that the principal and interest on these securities are from issuers that are investment grade.

The unrealized loss on U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities related primarily to interest rates and not credit quality, and because the Company does not intend to sell any of these securities and it is not more likely than not that it will be required to sell these securities before the anticipated recovery of the remaining amortized cost, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2013 and December 31, 2012.

In evaluating the underlying credit quality of a security, management considers several factors such as the credit rating of the obligor and the issuer, if applicable. Internal reviews of issuer financial statements are performed as deemed necessary.

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at September 30, 2013. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months and longer. There are 105 and 2 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 279 holdings at September 30, 2013.

September 30, 2013

Less Than 12 Months

12 Months or Longer

Total

Temporarily Impaired Investments

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

(Dollars in thousands)

U.S. Government Sponsored Enterprises

147,360

1,756

—

147,360

1,756

U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities

579,478

7,621

7,787

188

587,265

7,809

Total temporarily impaired securities

726,838

9,377

7,787

188

734,625

9,565

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at December 31, 2012. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months and longer. There are 3 and 1 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 96 holdings at December 31, 2012.


	December 31, 2012
	Less Than 12 Months				12 Months or Longer				Total
Temporarily Impaired Investments	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)
U.S. Government Sponsored Enterprises	$	9,994	$	8	$	—	$	—	$	9,994	$	8
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		8,936		50		5,371		24		14,307		74

Total temporarily impaired securities	$	18,930	$	58	$	5,371	$	24	$	24,301	$	82